- What is a self-directed IRA?
- What are the benefits of a self directed IRA?
- Why haven’t I heard of a self directed IRA before?
- My cpa/attorney/financial advisor hasn’t heard of a self directed IRA, what should I do?
- Can I be assured that self directed IRAs are allowed under IRA rules?
- Are my self directed IRA investments guaranteed?
- Are self directed IRAs for everyone?
What is a self-directed IRA?
A self-directed IRA is technically no different than any other IRA (or 401k). A self directed IRA is unique because of the available investment options.
Most IRA custodians only allow approved stocks, bonds, mutual funds and CDs. A truly self directed IRA custodian, such as Equity Trust, allows those types of investments in addition to real estate, notes, private placements, tax lien certificates and much more.
What are the benefits of a self-directed IRA?
In addition to the tremendous IRA benefits (tax-free profits, tax deductions, asset protection and estate planning), you are able to invest tax-free in investments that you know and understand, which through the power of compounding interest, will create true wealth for you and your family.
Why haven’t I heard of a self-directed IRA before?
While the concept of investing in real estate and other assets in retirement plans has been around for more than 30 years, the concept hasn’t received large attention because most custodians who offer IRAs (banks and brokerage firms) focus on mutual funds and CDs because they have vested financial interests in you selecting those investments from them.
Because the majority custodians focus on stocks and CDs there is a misperception that that is your only investment option for retirement plans, which is not the case (see allowable investments for IRAs).
My cpa/attorney/financial advisor hasn’t heard of a self directed IRA, what should I do?
A trusted advisor who has not heard of self directed IRAs is not an entirely uncommon experience, given their relatively unknown nature.
At Equity Trust we have worked with thousands of professional advisors across the country to educate them regarding IRA and self directed IRA rules so they can best customize advice to meet your personal needs.
If your advisor hasn’t heard of self directed IRAS before, he/she can contact an Equity Trust Retirement Specialist at 1-888-382-4727 or encourage them to get to join our self directed IRA professional advisor network.
Can I be assured that self directed IRAs are allowed under IRA rules?
As long as you follow relevant rules the answer is yes.
There are specific rules regarding IRAs, and in particular, self directed IRAs that you should be familiar with to ensure compliance.
There are certain types of transactions that you can not perform through an IRA. Most importantly, the IRS prohibits “self dealing,” which are investments in which you or your family members of lineal descent have prior ownership. For more information, please see IRA rules section.
Are my self directed IRA investments guaranteed?
No investment (aside from FDIC-insured deposits) is guaranteed and self-directed investing is not for everyone. However, most successful investors feel that the investment risk in assets they know and understand is much less than that associated with investing solely in conventional IRAs.
Are self directed IRAs for everyone?
Self directed IRAs are not for everyone, they are for those who want to create wealth using their knowledge of investments outside of stocks, bonds, and CDs.